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Monday, 11 November 2002
Page: 5877

Senator CHERRY (2:57 PM) —My question is to the Minister for Finance and Administration and concerns the proceeds from a proposed Telstra sale, which may or may not be used to pay off debt, depending on who in government is speaking. Has the minister availed himself of the ready reckoner provided by the Parliamentary Library to look at the real budgetary impact of the Telstra sale? Is he aware that, based on current share prices, the likely sale costs, the current bond rate on interest and the average profit growth for Telstra over the last four years, the model forecast an accumulated loss to the Commonwealth budget of $940 million over the first five years following a Telstra sale? Given the sale is such a poor outcome for the federal budget, will the Department of Finance and Administration be withdrawing support for such a sale?

Senator MINCHIN (Minister for Finance and Administration) —I have not read the document in question, but I look forward to doing so. I will just make a few points. The government has always said that, while its policy in principle is that the remaining shares of Telstra should be sold, we made it clear we would not proceed to implement that policy unless and until we conducted the Estens inquiry, examined its findings and decided on a course of action. We have only just received the Estens inquiry report and are in the process of considering our response to it. If, as a result of that report, we decide that it puts us in a position to implement our policy, we would then implement legislation to that effect—that is an if.

If the parliament then approves that legislation, the government would then have to decide under what circumstances to proceed with a sale. Obviously, as a responsible government, one that has managed the nation's affairs so well for nearly seven years, we will make a very responsible decision on the question of the basis on which a sale would proceed—if the parliament approves legislation that we may or may not introduce, because that decision has not yet been made. So this is all utterly hypothetical. The basis on which the Parliamentary Library has done its figures is obviously utterly hypothetical, because no decision has been made. All I want to do is assure the Democrats, the Senate and the nation that the government will act with appropriate and due responsibility as to the timing of any sale to ensure that the position of taxpayers is optimised in any sale that does take place.

Senator CHERRY —Mr President, I ask a supplementary question. Continuing on with this very responsible decision-making process, can the minister inform the Senate whether the Commonwealth will be paying out unfunded superannuation liabilities out of the sale price, as suggested by this morning's Financial Review, and is he aware that if this is done then the accumulated loss to the first five Commonwealth budgets following the sale rises to $2 billion?

Senator MINCHIN (Minister for Finance and Administration) —As Senator Cherry may know, the arrangements to which he refers were entered into in 1990 under the previous Labor government. Under those arrangements the Commonwealth has been making payments to fund Telstra superannuation through determinations under the Superannuation Act 1976. Those arrangements also apply to Australia Post. Those arrangements are in place, are continuing and are an obligation that we have in relation to Telstra superannuation, and any suggestion or views about what might happen to those arrangements if indeed we did proceed to the full sale are again in the realm of hypothesis.

Senator Hill —Mr President, I ask that further questions be placed on the Notice Paper.